How to Spur Growth in the World’s Major Economies

(Bloomberg Businessweek) -- Prospects for growth are fading across much of the world. Here’s Bloomberg Economics’ five best ideas for giving some major economies a shot in the arm..Untangle Brazil’s Tax Web.Brazilian companies spend four times as long preparing their taxes as their Latin American peers. An overhaul of the Byzantine tax code, now under debate in Congress, could boost gross domestic product by 10% within 15 years, according to the Center for Fiscal Citizenship..Turn Saudi Oil Into Growth Gold.Proceeds from a partial privatization of Saudi Aramco could help improve Saudi Arabia’s dismal productivity performance if invested wisely (no wasteful public works, no raises for overpaid civil servants). That could almost double GDP growth, to more than 4%, and cut the unemployment rate to single digits..Reform Italy’s Labor Market.Reducing Italy’s natural rate of unemployment (i.e., the level that does not spark inflation) to 7%, from its estimated level of 9.2%, would lift potential growth by more than 1 percentage point. The country needs to align wages with productivity, lower taxes on labor, and make dismissals easier..Unleash Indonesia’s Animal Spirits.President Joko Widodo has pledged to build out infrastructure, develop human capital, and ease foreign investment limits. If he delivers, growth could rise by 1 to 2 percentage points over the next decade—significant for an economy that expanded 5.2% in 2018..Put More Women to Work in Japan and Korea. Japanese women do more than five times as much housework as men. In South Korea it’s over four times as much. Getting more women into the labor market, and monetizing a larger share of unpaid housework, would deliver a double boost to growth. In Japan unpaid domestic work is worth about 25% of GDP, according to the Cabinet Office..To contact the editor responsible for this story: Cristina Lindblad at mlindblad1@bloomberg.net.©2019 Bloomberg L.P..With assistance from Bloomberg

How to Spur Growth in the World’s Major Economies

President Joko Widodo has pledged to build out infrastructure, develop human capital, and ease foreign investment limits.

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